The tech industry provided much need stimulus to the markets on Tuesday, after the the government temporarily eased curbs on China’s Huawei Technologies, alleviating concerns about pressure on future corporate results within the tech sector.
Trump added Huawei to a trade blacklist last week, leading several companies to suspend business with the world’s largest telecom equipment maker, a move that could weigh on their sales. Chipmakers, many of which sell to Huawei, bore the brunt of Monday’s sell-off.
However, late Monday the government granted Huawei a license to buy U.S. goods until Aug. 19. The development offered a reprieve to shares of chipmakers, with the Philadelphia Semiconductor Index gaining 2.1% to end a three-day slump.
Shares of Huawei suppliers such as Intel, Qualcomm, Xilinx Inc and Broadcom Inc rose between 1% and 4.6%.
Technology shares rose 1.2% to add the most gains to the S&P 500 among the benchmark index’s major sectors.
Even with Tuesday’s gains, the S&P 500 will likely post its first monthly decline of the year. The index is now 3% away from its all-time high on May 1 as it has been pressured by mounting concerns about a prolonged U.S.-China trade war.
Among the S&P 500’s major sectors, only defensive consumer staples shares traded lower, down 0.3%.
Shares of Kohl’s and J.C. Penney fell sharply after the two department stores’ quarterly results missed expectations.
Kohl’s shares closed out the trading day down 12.3%, the largest decline among S&P 500 companies, after the retailer cut its full-year profit forecast and reported quarterly same-store sales and profit that missed expectations.
Shares of rival J.C. Penney fell 7.0% after the company also reported a bigger-than-expected fall in quarterly same-store sales.
With 463 of S&P 500 companies having posted first-quarter results, 75.2% have topped analysts’ profit expectations. Analysts now expect first-quarter earnings growth of 1.4%, a sharp turnaround from the 2% loss expected on April 1, according to Refinitiv data.
Approximately 6.09 billion shares changed hands on the major domestic equity exchanges, as compared to the 6.97 billion share average over the past 20 trading days.